UK border risks snarl up in no-deal Brexit: audit office

LONDON (Reuters) - The United Kingdom’s border risks being snarled up in a no-deal Brexit because as few as 30 percent of traders are prepared, the European Union would introduce controls and organized crime groups would exploit weaknesses, the National Audit Office said.

A man attends a candlelit vigil on the border between Ireland's Donegal county and Londonderry county in Northern Ireland in Lifford, Ireland, October 16, 2019. REUTERS/Phil Noble

The United Kingdom is due to leave the EU on Oct. 31 and while Prime Minister Boris Johnson is trying to strike a last-minute deal, he has said that if the EU refuses then he will lead the world’s fifth-largest economy out without an agreement.

A no-deal exit, the nightmare for many businesses, would be abrupt with trade reverting to basic World Trade Organization rules: new customs controls, tariffs and non-tariff barriers would be applied to 438 billion pounds ($554 billion) of trade.

The most significant risks remain the low proportion of traders ready for the new checks, the likelihood of EU controls and the unsustainable nature of any compromise on the Northern Irish border, the National Audit Office said in a report.

“Although the government has actions under way to influence these, mitigating these risks is now, to some extent, out of its control,” the government’s spending watchdog said.

“It is impossible to know exactly what would happen at the border in the event of no-deal on 31 October 2019.”

Over 228 million tonnes of freight - equivalent to 760,000 jumbo jets - crossed between the United Kingdom and the rest of the EU in 2018, so any disruption could swiftly turn southern England and northern France into sprawling lorry parks as ports came to a standstill.

Dover, Europe’s busiest ferry port, is as prepared for Brexit as it can be but there are uncertainties over the extent to which freight operators are ready for new declarations and whether France will keep goods moving, the port’s chief executive, Doug Bannister, told Reuters.

NO-DEAL BREXIT

The British government’s no-deal war gaming is sobering.

The number of annual customs declarations would balloon from around 55 million to 270 million and just 30-60% of heavy goods vehicles traveling across the Channel might be ready for French customs, the audit office said.

In the latest worst-case no-deal scenario, Britain estimates cross-Channel flow rate would fall to 45-65% of current levels on the first day after Brexit, it said.

Only about 25,000 of the 150,000 to 250,000 traders that may need to make a customs declaration in the event of a no-deal Brexit had registered with a scheme that allows them to delay submitting their declarations and payments of import duties.

“A large proportion of traders and businesses would not be ready for new customs and regulatory controls if the UK leaves without a deal,” the audit office said. “EU member states are likely to introduce controls which would significantly reduce the flow of traffic that is able to cross the border.”

If haulers are not ready for the checks, then they would be diverted from going to port. In a worst‑case scenario, just over 3,000 lorries a day, or 80% of lorries carrying loads, may need to be diverted because they do not have the right documents.

Those without the right documents will be diverted to Ashford in Kent for up to 24 hours while they seek appropriate documents. If truckers then try to proceed to the Channel ports without the right documents, the drivers will be subject to a 300-pound fine.

“Despite the government’s actions, it has been unable to mitigate the most significant risks to the effective functioning of the UK border in the event of no deal and the border would be ‘less than optimal,’” the audit office said.

“It is likely that organized criminals and others would quickly exploit any perceived weaknesses, gaps or inconsistencies in the enforcement regime,” it added.